Teen had access to savings account...

LCH611

Last Sept my husband and my mother in law wanted to set up a savings account for our 16 yr old son as my late father in law had left sufficient for him to have enough to put down a deposit when the time came to buy a house. When speaking with the High St Bank they were very very clear about the fact that our son was not to be able to have access to the money as he would doubtless fritter it away. A savings account was set up on that basis and the money was deposited. However it transpired that a current account was set up alongside it (if this is standard practice it absolutely was not explained clearly at the time), but because the correspondence was sent to our son we were unaware that this was the case. 6 months in and the urge to dip into the money became irresistible  and it quickly got out of hand. By the time we discovered what had happened a very significant sum of money had been spent. He has been working hard to pay the money off, but casual jobs for teenagers are not easy to come by in this current climate and there is still nearly £8k to pay off. As parents we need to deal with the behaviour and thought process that caused this to happen, but do we have any redress at all against the bank?

Yellow_mango

As far as I am aware it is not possible to open a bank account (other than a JISA or CTF) for a child to which they have no access. Or indeed set up any account for any other person without their consent. When setting up accounts for my teen sons they had to be part of the process - answer questions themselves, and provide ID etc. The requirements may be lower for children under 13, but the money is still in their name. It honestly seems more likely that your MIL didn't fully understand what the bank was saying than that she was actively misled. 

So are you saying that all the login details and cash card for this new account arrived at your house and your son accessed them and spent the money (which would have had to be transferred from the savings account to the current account prior to spending), all without your knowledge? That alone is quite impressive. My kids needed significant assistance to navigate online banking registration. Did he not even ask why he was getting letters with login details and why there was an account being set up in his name? And why there was loads of money in it? 

surreysaver

What do you mean '£8k to pay off'? Are you trying to imply there was an overdraft facility?

LCH611

Hi yes, he transferred the money to the current account and then on to a different current account - he is highly computer literate. He attended the meeting and answered all of the questions. Neither my husband or my MIL would have set up the account had they known this was even a remote possibility, but yes all the banking info came to him.
By £8k to pay off I mean the balance to reinstate the account to the former level - he has been working (doing IT projects) to put the money back

eskbanker

LCH611 said:

Last Sept my husband and my mother in law wanted to set up a savings account for our 16 yr old son as my late father in law had left sufficient for him to have enough to put down a deposit when the time came to buy a house.

Was this explicitly spelt out in the will?  If FIL was bequeathing a lump sum to your son, to be accessible once he reached 18, then the executors would have been responsible for setting this up properly as a trust account - even if this wasn't an explicit instruction in the will then it should have been straightforward to open a two-year fixed term account that wouldn't be accessible.

What specific accounts were actually opened?  If the savings account wasn't fixed-term or a trustee account, then who should have been able to control access and exactly how?

colsten

So he has spent his money. Not in the way it had been hoped he would spend it, but that's neither here nor there. It is his money that is now missing from his house deposit. Tough luck. Not sure why you would expect the bank should gift him money, and not sure why you would expect him to "pay the money off" - it's laudable if he has decided to save up what he spent but you can't force him to pay himself.

elsien

LCH611 said:

Hi yes, he transferred the money to the current account and then on to a different current account - he is highly computer literate. He attended the meeting and answered all of the questions. Neither my husband or my MIL would have set up the account had they known this was even a remote possibility, but yes all the banking info came to him.
By £8k to pay off I mean the balance to reinstate the account to the former level - he has been working (doing IT projects) to put the money back

Techically, although you didn't want him to have the money, if it's in an ordinary account  in his name then it's his money so there's not really anything to pay off. 

Sea_Shell

elsien said:

LCH611 said:

Hi yes, he transferred the money to the current account and then on to a different current account - he is highly computer literate. He attended the meeting and answered all of the questions. Neither my husband or my MIL would have set up the account had they known this was even a remote possibility, but yes all the banking info came to him.
By £8k to pay off I mean the balance to reinstate the account to the former level - he has been working (doing IT projects) to put the money back

Techically, although you didn't want him to have the money, if it's in an ordinary account  in his name then it's his money so there's not really anything to pay off. 

That what I thought.   It's his money.   

He might not have used it as was expected of him, but once the money was put in an account in his name, it's his (at that age).

There is nothing to "pay off".

You could have stern words and try and make him realise that he has "stolen" from his future self.   There will be no more money forthcoming.   Maybe he'll learn that way.

elsien

When he comes to 18, he may also decide he wishes to spend it on something else like travelling the world. A house deposit may not be his dream, or not till he's a lot older. 
Just putting that out there for consideration, because if the will just left him a sum of money without any consideration about ensuring a trust of some sort, although people may wish him to spend it on a house deposit that really is going to be down to him at the end of the day. 

Mojisola

Did you not notice that he had new possessions worth over £8k?

LCH611

Well all of the above is true. It is of course his money but his grandfather wrote him a letter saying that he wanted him to do something special for it (deposit for a house, nice car, travel the world etc) and my mother in law felt that if he was allowed to fritter it away she would be letting her dead husband down as she promised him that she would ensure that didn't happen. She doesn't yet know, hence the desire to put it back as it would be terribly hard for her to bear in a year that has been tremendously difficult anyway. He wishes to pay it back as he is so remorseful. He didn't have £8k of new possessions as turns out that it was spent on new parts for his computer (that I neither saw turning up, nor being installed), gaming, going out for pizzas at lunchtime rather than eating in the school canteen, and being lavish and generous with his friends. That's the worst part of it, there is nothing to show for it!